Ms OWENS (7:43 PM)
—The Broadcasting Services Amendment (Subscription Television Drama and Community Broadcasting Licences) Bill 2006 is a relatively small bill compared to many that we consider in this House but a quite significant one for two reasons. Firstly, it relates to regulation and structures in broadcasting that bring diversity and cultural benefit to Australian audiences—and we should always be concerned that our broadcasting industry is doing that in the most efficient way possible. Secondly, in a world surrounded by mountains of regulation, this bill is actually a simplification. The government is known for creating another piece of paper every time it breathes, yet this bill quite cleverly reduces some of the paper for two important sectors of the broadcasting industry by dealing with two completely unrelated issues.

The first one relates to the requirement that subscription television channels that broadcast predominantly drama direct 10 per cent of their drama production expenditure to new Australian drama. This bill makes some amendments that simplify the process and change some of the definitions of what can be included in that 10 per cent. The second one is a mechanical matter that allows the Australian Communications and Media Authority some discretion to transfer community broadcasting licences from one person to another under quite specific circumstances—again, extremely important amendments that will ease the way for two sectors in the broadcasting industry: the subscription television channels and our community broadcasting sector.

Schedule 1 amends the Broadcasting Services Act 1992 to increase flexibility for subscription television companies as they seek to spend the required 10 per cent of their drama budgets on new Australian drama. This follows a review back in 2004 of Australian and New Zealand content on subscription television and broadcasting services, as required under the Broadcasting Services Act. The review was tabled in parliament in March 2005. It found that the requirement for expenditure of 10 per cent on new eligible drama was quite appropriate and should be maintained, but it did suggest a few ways to simplify the process. Under the old act, pre-production costs cannot be claimed as part of the 10 per cent until the project progresses to principal photography. Also, that 10 per cent cannot be carried over year by year—the 10 per cent claimed on Australian drama must be spent within the one financial year. Both of these requirements are incredibly harshly prescriptive for an industry which does not work on an annual basis in respect of its new productions.

Productions may develop over several years, with several different partners and each with their own time frames. Essentially the old act was bad regulation. It unnecessarily impacted on the creative and financial decisions of a company which was seeking to do the right thing. This amendment adds considerable and needed flexibility. For a start, it allows pre-production such as script development to be included in that 10 per cent well before the project progresses to principal photography. It is hoped that this will encourage subscription television companies to invest more heavily in the script development phase. There is quite a belief in the Australian industry that there is insufficient development of scripts in the early stages because of a lack of funds. This amendment encourages subscription television to invest in the early stages, allowing for considerably greater risk-taking and more creative projects in the early stage before they are obliged to continue to the second stage. It also allows for a carryover of the 10 per cent into the next financial year, which reflects the fact that, in this industry, projects are not begun and ended in any particular financial year and may stretch over several years. So this amendment reflects the reality of the expenditure pattern in the creation of television drama.

The bill also amends the definition of drama to bring it into line with regulation for free-to-air television. This is important given that in the film and television industry producers often deal with several different investors, quite often from different countries. At the recent Screen Producers Association conference in Brisbane, I attended an extremely amusing trivia quiz. A number of producers were asked specific questions—for example, how many Australian actors do you need in a Swiss-French co-production with the ABC? What percentage of a budget must be spent in France if your co-producers are Canada and Australia? It was fascinating to see the extraordinary detail that these producers carried around in their heads simply to be able to access the range of moneys that they needed to get a project off the ground.

One could argue that this is just the beginning for them. It is a very small step to bring subscription television and free-to-air television into line in Australia, but there is clearly a great deal of work needed to bring the range of parties that invest in film into the same regulatory framework so that producers can make decisions around what the project needs and not what the regulators need. This is a significant step that not only will bring it into line with free-to-air television but also will allow businesses to develop their projects around the context of the project itself and not around the needs of government regulation. This is particularly true for companies that essentially are trying to do the right thing, not necessarily the wrong thing.

The second part of this bill relates to community broadcasting. It is quite a simple change which recognises that community broadcasters may start quite small and change their corporate structures as they grow. Currently a community broadcaster may be an incorporated association and may, some time down the track, seek to change into a company limited by guarantee. Under the old act it is not possible for the Australian Communications and Media Authority to transfer that community licence from the incorporated association to the company limited by guarantee. It has to suspend the licence and call for new applications. This change is quite a simple one but it allows the Australian Communications and Media Authority to make that change without a fuss. The change recognises that we need flexibility for organisations that essentially are doing the right thing.

Going back to the subscription television industry: while this regulation does allow greater flexibility both in quality control and business decisions, one must recognise that with greater flexibility comes the need for greater scrutiny. The regulation is due for review in 2008, which perhaps is a little too early to tell because of the long lead-time for television production that will allow only two years in what is often a much longer cycle. Nevertheless, the need for review is even greater once one introduces this kind of flexibility into the system. It is extremely important that the new flexible legislation is not used by those who are uncommitted to Australian content to avoid their obligations.

The Film Commission, in a submission to the review in 2004, talked about the need to assess the number of hours and not just the number of dollars. I would question that, given that we hope that subscription television will invest in a range of product, some of which may be quite expensive and designed for export. So the number of hours will not necessarily reflect the commitment or the actual value to the Australian film and television industry of the work produced. However, it is important that we carefully scrutinise the outcome of this amendment over time so that we do not find companies using preproduction as a way to limit their exposure—spending their 10 per cent in areas which they can essentially write-off quite easily because the project does not go to filming at all. I know there is some concern on the producer side that that will be the case with some, but again this bill allows those who are doing the right thing to well and truly get on with their job—and it must always be a priority that those who are doing the right thing are not unnecessarily regulated or have barriers put up preventing them from doing that in the best possible way.

In closing, I would like to commend the government for finally making these amendments. They are an important simplification for two very important parts of the broadcasting sector, and I am sure they will be well received. They are not, of course, all that the producer side of the sector would like to see. In the submissions prior to the review, there was considerable argument put from the production side of the industry that the 10 per cent quota was too low. It is, of course, considerably lower than the free-to-air television industry and there is some argument put by producers that it should be raised. The review found that this was not appropriate at this time, and this amendment does not deal with raising that level. But it is worth noting that, as the industry changes, becomes more profitable and has a greater role to play in the development of Australian television, there will no doubt be even greater pressure from the producer side of the industry for that quota to change. The Australia-US Free Trade Agreement does allow Australia to increase that quota up to 20 per cent, and there is no doubt that the producers in the industry will continue to pursue that objective.